Well, after near 10 years of workkng away from home I´ve finally had enough!

I´ve been thinking of setting up a small car dealership for a while now and I think I´m ready to take the plunge.

Afriend of mine has a massive pitch and he´s going to start renting smaller pitches out on the cheap so this could be a good place to start.

My idea is to only keep around 5 or 6 cars on the forecourt at one time and I intend to deal in ex-lease diesel´s as I think there will be a decent market for reliable, economical, low mileage diesels with full history etc.

What I would like from the good people of PF is any advice, experience (good or bad) you have with the motor trade as I would like not to crash and burn!

Also, I´ve read up a little on buying and selling trade/ex lease cars etc, I just need some advice on what I will need to make a good go at it

All advice welcome

thanks in advance

 

i would try and sell from your home as that way you dont have to pay forecourt fees, rent, rates, etc

My cousin sells a few vans on the side from home and does alright out of it too

 

Cheers ran,

Does your cousin use a trader policy and have trade plates etc?

Reason I ask is, I'll be wanting to give test drives but don't want to keep the cars taxed and if I can keep everything on 1 policy that would be ideal.

Also, I'll be selling cars (hopefully) in the 5-10k price range, so does anyone know how I'd go about offering finance?

Thanks again

 

Don't have advise to offer but good luck with it all.

 

Before you even think about mentioning finance to a customer you need to get a Consumer Credit Licence from the OFT, category C for brokerage.
To offer credit without it is a criminal offence. and few lenders will talk to you about setting up a facility without seeing your licence first.

Also, your local council may operate a licencing scheme for used car dealers - you need to check that, and you must not assume you will be covered by your mate's licence if he has one.

 

As said, i think getting a pitch ect first off is a little bit of a gamble that will bite you in the arse VERY easily

Sell from home for a while first to get yourself into it....I know traders that have been at it YEARS and they all say its alot easier to sell from home........ and a HELL of a lot cheaper

 

just remember also if your selling from home the cars will all have to be taxed and insured if kept on the road.

Also you will piss off the nieghbours (and rightly so) if parking is tight round your way and you suddenly add 5 cars to your street

 

I deal in a few cars and have dealings with a lot of dealers and have done for some time and come the end of october its a very quiet time until around feb/march, cheapies seem to sell well at the moment but more expensive is hanging around a while. i have trade insurance with test drives but no trade plates as you will probably need a premises to get them.

might be worth getting some business cards into main dealers offering to buy PX's, i have a thing going with the salesmen at a vauxhall main dealer and get quite a few cars that way and find them alot cheaper than the auctions, iv been doing this along side my valeting business.

 

good luck!
its a very difficult game to get into now.you will not be able to price things the same as the more established car dealers locally so will probably struggle to buy cars,advertise and prepare them for sale and still make enough to pay you a wage after paying your overheads.especially when they bring them back with issues that require putting right which can eat up any profit.
i set up in car sales in 2004 dealing primarily in ford rs cars-this went well for a couple of years as the rs market was still popular but it began to tail off(cars were harder to source for sensible money,buyers were turning to saxo vtr's etc instead of rs turbos and imprezas/evo's were replacing cossies as the choice cars).i tried to follow the trends with the sports stuff but it just plodded on rather than make money.
from mid 2008 when the car game went tits up and the only stuff selling were cheaper runabouts or more sensible diesels rather than the sporty stuff, cars were almost impossible to source.
i gave up towards the end of sept 2010 when i had run out of money.

i now work for a large (well,40+ cars on site from £995-£45000) car sales garage in their garage.they seem to be doing ok but they have been established 30+years.they give 3 months unlimited warranty,12 months mot with every car and they do charge top money for their cars-but they do sell them(prob 30-40 per month).i would never have got the sort of money they get for their cars.

i wish you all the best in your venture but if asked wether i would start up again i would have to say i wouldnt.it becomes a 7 day/24 hour job and if you have a concience or are subject to getting stressed out then youre doomed!im happier and more settled now than i have been in the last 5 years.i shut off at 5pm and have family/chill out time,and my wage is steady(ok it doesnt have the highs of selling 5 cars in a week,but it doesnt have the lows of not selling a car in 2 weeks and looking to sell them for less than you paid just to free up some cash).

hope some of this makes sense!......

 

To me,your going into the worst possible area of the market,the cars that even main dealers struggle to sell,finance is so hard to get right now for even squeaky clean types that it often works out cheaper to buy new.
Also,at around 3-5 years old (the market I'm assuming as their ex lease) seems to be around the time where these cars start getting problems.

Sorry if it sounds negative but this is the WORST time ever to go into your own business,were heading deeper into recession if you ask me and if you want to exploit the market I'd suggest going for mega cheapies,under a grand,long mots,offer to tax etc.

You'll start getting more and more people coming to you offering p/x's that have stupid things wrong like stereos not working,bald tyres etc,real easy stuff but you can stab them heavily against your cars as I'll guarantee you 90% of these people are desperate to get back on the road.
My mate ran his business like that for years and was making so much money,he didn't know what to do with it.
Sadly he decided to put it up his nose and now has nothing,but I'm sure that won't happen to you!!!!

This isn't some keyboard warrior/dreamer talking here either,I had my own business and nearly lost everything through it,horrible times.
Trade from the house first,build your contacts up,suppliers,auctions,other traders and when your ready THINK about it,as it's a huge jump in money to keep it all going,those bills don't give a fuck if you've had a bad week and sold nothing,they still want paying.
As for insurance,trading with no premises is fine,trade plates maybe more difficult but for the minimal amount in perspective tax costs,it's worth shoving on,if your dealing in under 1.5 with power steering (big clue to what sells there) then it's only £70 for 6 months,shove a £100 on the price of course!!!

Trading can be very lucrative,I made decent money off it on the side for years doing exactly what I said above,I lost my way and went damaged which is hard to make a really good profit on unless your very disciplined and honest with yourself,less so to the punters!!!

Vans do well also,but of course can be harder to store and may need more tidying,but can yield good profits,often companies sell them on simply because they reach a certain age,not generally cos there's major probs as you'll find most vans are still in use right up til the day they get sold hence major repairs tend to get done ASAP,the vans not making money sitting idle!!!

Sometimes specializing can pay off,I've got tons of knowledge about ka's and seemed to be forever repairing them,it seemed then I was getting a lot of work through this and making good money as the jobs just got easier and easier the more I did them,they sell well too,but never buy one without a ticket unless your very handy with a welder!!!

 

just had a quick look at my costs and in 6 years i had spent £47000 on renting a 1000sq ft unit.
autotrader costs were about £2000 per year
hpi checks were over £500 per year!(make sure you check everything you buy and p/x!).
also remember vat- if youre selling cars over £5k,you will soon go over the threshold.

 

I'm drunk right now, but start up business advice is my profession.

When I am sober, email me stuartmacaulay@me.com with all your info, business plan and I will help you out

 

i sell a few but nothing big but have to say its been a bit slow lately but if you can get the right cars for the right money then no reason it wont work

good luck mate

 

Hi,

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Cheers,

Jonny

 

Cheers for the reply Iain,

How would I apply for a consumer credit licence and would I get one if I were traiding from home?

 

parking isn´t the best where I live, we have a double drive but that houses mine and the wifes car......I do however have a massive side garden but it would need bringing up to street level as it´s a sheer drop at the min

It was filled in by the previous owner in the past but a neighbour complained so it was dug back out...I recon with planning permission it could be done though and this would provide a great place to store cars

 

Cheers for that mate,

Fortunately I have quite a few main dealers very local to me, so that sounds like a very good idea. I´ll try that when I get home

As for offering test drives, do you keep the vehicles taxed or do you just tax them when someone is interested?...reason I ask is, I´m trying to keep costs as low as poss

 

Hi Jay,

Thanks for the advice mate,

I don´t know you, but I remember reading your thread when your business was about to go under. I was gutted for you as you´d clearly put alot of time, effort and hard graft into making it work!

This is why I´m asking for advice on hear as I want a broad range of oppinions and as I´m not experienced in the trade, I could easily get it wrong !

By the sounds of things, I´d be best off trading from home as it will keep costs low and I wont have too much money in it sohould things go horribly wrong ...

I have considered going self employed on agency, so if the cars arent selling, I can go back on the power stations to make a few quid.

Thanks again for the advice mate

 

Wow, thats alot of costs !

Fortunately my mate has a big unit, he´s said I can store 5 cars there for 100 quid a month so trading from home may be ok.

Excuse my ignorance here but do you mean I´ll have to pay VAT on my earnings after a certain amount?

 

Excellent advice there mate, thank you

I know we are in a bit of deep water with the recession but I´m fortunate to have a bit put away. I was going to take a business loan to get things started but by the sounds of things I´d be better just buying them cheap and moving them on cheap for a while. Especially since I can get mot´s and repairs done for next to nothing (helps when their family)

Thanks again

 

Thanks mate,

I'm on holiday ATM but I get back Sunday so I'll drop you a mail with all my plans

 

Yeah he has a trader policy but no trade plates. Another mate of mine who deals in motorbikes has trade plates

I'd look at the cheapies at this time of year as they will be good sellers and economical cars - thirsty or sports cars are a big no no at the run upto xmas.

You can even get bargains around dec/jan/feb as people will have maxxed out their credit and will be selling stuff cheap to claw some cash back - which is when you should pounce

Defo sell from home and keep all costs to a minimum. Then you will start to make a profit slowly and build it up from there

Also, another mate, has contacts and agreements with several local garages and he has to buy whatever cars they send his way - sometimes he gets right bargains and other times they are sheds - but you have to take them all and move them on

 

Good luck mate i hope it will go well for you.

 

1 thing about selling cars from home
it only takes 1 unhappy customer
you will never be able to leave problems at work

 

the cars we seem to be selling a lot of at the moment are 04-06 fiestas
02-06 corsas/03-06 focus/05ish bmw 1 series/merc b class.

these are the things that seem to be constantly going out.....
i would avoid 2.0 turbo diesel audi/vw as we seem to be getting constant issues with heater plugs/throttle bodies/injectors amongst other things.

 

I wouldnt bother with the above but if your going to try dont put your real phone number in i had approx 10 calls from them

 

Excuse my ignorance here but do you mean I´ll have to pay VAT on my earnings after a certain amount?[/QUOTE]

Once ur turnover is more than 82k u have to pay vat on the difference between purchase price and sale price .

A little tip don't just buy cars because u like them or they are cheap , do some reach on whatis selling !

If u want to talk and a few pointers drop me a pm , I've just met a trader up ur way ho has alot of stock at good price I could put u in contact .

 

if you dont know how to check the cars over yourself or are in no way mechanically minded then i would think twice about going into car sales at all mate unless you have some good mechanic friends who can at the drop of a hat check over any vehicle you will be buying before you buy it, as a lot of jobs on cars nowerdays can easily exceed 500quid yet there are very few cars these days that you will make 500quid profit on so you have to be very carefull picking cars as you would soon go under if cars were coming back needing work that cost more to put right than the profit you make!
plus bare in mind we are not even into the middle of the recession yet, i forecast at least another 7 years before we are out of it and while times are hard you will find the motor trade a difficult place to be in, trust me i own my own garage and im happy at the end of the month if i break even at the mo!

 

botters i dont think we will have 10 years of actual recession

 

Shiftyoldscoob,well done for reading and replying to all the replies on here,their mainly from people who've been there/done that/got the t-shirt/physical and mental scars to prove.

My favorite part of business was selling cars but you'll be shocked what people expect for the money,I had one guy bring back a £400 Ka about 5 times with various stupid faults (all explained before he bought it),he drove it for a year,it needed £50's worth of welding for the next Mot so he then decided to tell everyone what a bad buy it was!!!
Luckily for me most people took my side and saw that it was a cheap little car that never broke down,he still got £150 back in scrap a year later!!!
A good point about spending on repairs above,looks like you maybe ok in that respect but bear it in mind,I always look to double my purchase price unless it's taxed/tested and ready to roll,usually cos an Mot is £40,tax £70-120,1/2 a day cleaning& products £40,advertising £10-15,gallon of fuel £6.50 so something like a £300 escort diesel could soon owe you £550 to get on the road,I'd then want realistically £750 for that car as a house trade,forecourt would be £995.
Of course if I just taxed it and gave it a mini valet owing me £450 then £750 is a nice drink,well,you know all that anyway.
Keeping your fixed costs down is the key,as their what's going to bite your bum as jay pointed out,they don't wait like you do,they want their money every week.

Regards your power station job,is that with a firm called powerman?
Only asking as I went for a job "interview" if you could call it that with them and they never even bothered to let me know I didn't get it.
Pay etc was ok,but as you said a lot of working away and a strange way of paying o/t,one big lump in February?
My mate got me the interview and reckons their a great firm to work for so perhaps I just gave the wrong impression?
Who knows???
Good luck with whatever you do mate,hope it works out better for you than for me!!!

 

thing aint selling much at the mo, you have to give things away, so be careful what and where you put your money mate! good luck with it anyway mate

 

regards to the ka you always get one wan!!r

 

start from home mate i doing very well since i started a year ago cars are still selling if you have the right stock and price!

 

Also, another mate, has contacts and agreements with several local garages and he has to buy whatever cars they send his way - sometimes he gets right bargains and other times they are sheds - but you have to take them all and move them on[/quote]


Thanks again for the reply mate,

I will defos be steering well clear of anything sporty or fast as I just don´t see there being any profit in them for a small time buisiness....

With regards to your comment above, does your mate have to buy literally everything they send his way?...reason I ask is, I don´t want to be buying 100 cars a month

I don´t mind if theres a shed or 2 in there either as my uncle is a breaker/scrap man, so I´ll always get a good price on a weigh in , also one of my best mates breaks hondas so if they ever come up, I know he´d take my arm off at the rite price.

 

Thanks for the advice Jay,

These are the type of cars I was looking into selling as they are easiest to store for one and I think they´ll appeal to a broader market i.e new/young drivers

As for the 2.0 td vag lumps, I know a few lads at work who´ve got them and they´ve been a rite nightmare so I´ll be steering well clear!, same goes for the vauxhall 1.9 cdti´s..also I recon the vag´s will be a bit out of my price range, except of course the skodas.

Thanks for your help and advice mate, this is exactly what I was after, advice from people who have been there and done it

 

Once ur turnover is more than 82k u have to pay vat on the difference between purchase price and sale price .

A little tip don't just buy cars because u like them or they are cheap , do some reach on whatis selling !

If u want to talk and a few pointers drop me a pm , I've just met a trader up ur way ho has alot of stock at good price I could put u in contact .[/quote]


Thanks for the reply,

Don´t worry I´ll take the ford blinkers off for the sake of business lol

You have PM mate

 

Thanks for the reply mate,

I´m an industrial mechanic/blader by trade so I´m mechanically minded,

I know what to look and listen out for, so ´´touch wood´´ I´ll be able to avoid any nails !

As for a good mechanic who can do things cheap and quick, I ´ve got one of my best mates and my uncle at hand as they both own their own garages, so all the cars will go out not needing anything as I´ll put on 12 months test

 

Cheers for the reply mate, this is all really good advice I´m getting here

I work for a company called Alstom power mate, I used to contract for them but I´m now a supervisor with a salary etc so all my overtime is paid streight away !

Not a bad firm to work for to be fair but Im just fed up being away all the time !

 

Thanks again for all the replys people ,

I´ll reply to more when I get a chance later

 

yes, he has to buy whatever they send his way.

He seems to be doing alright out of it